Recruitment firm Staffline has set aside an extra £3.5 million after an investigation found workers in some food production facilities could have been historically underpaid.

A review was launched into the Nottingham company in January after allegations were made over invoicing and payroll practices within the group's recruitment division.

During the process, undertaken by independent legal advisers, shares in the firm were temporarily suspended and the publication of its annual results postponed.

Now, bosses say the review has finished and while they feel the majority of their policies 'were appropriate', one allegation remains over potential underpayments.

The group, based at NG2 Business Park, has been in discussion with HMRC to quantify the underpayment, which relates to compliance with the National Minimum Wage 2015 and are said to have taken place 'over a number of years'.

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The employees who may have been affected were in a limited number of food production facilities, and the underpayment relates to preparation time, which is often the period workers spend putting on workwear.

After taking legal advice, Staffline has now increased its "exceptional costs" for the year by £3.5 million.

John Crabtree, non-executive chairman of Staffline, said: "On behalf of the Board, I am pleased that we are able to take this positive step forward, providing clarity and reassurance to our staff, customers and shareholders.

"We have taken this opportunity to review thoroughly the implementation of our policies as we strive to set the highest standards.

"We look forward to publishing Staffline’s results for the year ended 31 December 2018 in due course and continuing to focus on delivering across our key growth objectives.”

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A provision of £4.4 million had already been made for estimated additional costs in the group's account for the year ended December 31, 2018. This was part of £20 million of exceptional costs which had already been announced in Staffline's trading update on January 8, 2019, which has now been increased to £23.5 million.

The Group's results for 2018 are now being audited and is anticipating its 2018 trading performance to be in line with expectations.

Staffline, which was founded in 1986, is one of Nottinghamshire's Top 200 companies as was listed as the fifth highest, ranked by turnover, in 2018. It reported in that year staff numbers of 2,357 and a turnover of £958 million.

Its clients include Sainsbury's and Tesco.

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